Energy Performance Contract – 4 Buildings on Hazen Drive Board/Meetings/2015...Annual allocation dependency clause ... DES, DoIT, labs) ... Energy Performance Contract – 4 Buildings

PRESENTATION TO THE ENERGY EFFICIENCY &

SUSTAINABLE ENERGY BOARD M A R C H 2 0 , 2 0 1 5

D E P A R T M E N T O F A D M I N I S T R A T I V E S E R V I C E S K A R E N R A N T A M A K I , S T A T E E N E R G Y M A N A G E R

M I C H A E L C O N N O R , D E P U T Y D I R E C T O R

Energy Performance Contract – 4 Buildings on Hazen Drive

Why Performance Contracting?

The State wants to “Lead by Example” in energy efficiency

Capital funds for energy projects are “trickling” in at best

Allows for deep retrofits, improves the quality of our buildings, and allows for new technologies and equipment

Law RSA 21-I:19-d Energy Performance Contracting

Allows agencies and municipalities to enter into

EPCs (Energy Performance Contracts) Requires RFP (Request for Proposals) process Provides criteria for selecting ESCO (Energy Services

Company) Limits contracts to 20 years Annual allocation dependency clause Requires inclusion of all energy measures that fall

within 20-year payback window

Performance Contract Basics

Represents an alternative financing mechanism to capital investment

Accelerates investment in cost effective energy conservation projects

Is a long-term partnership between the state and an ESCO

How it Works

ESCO’s provide energy solutions. Lighting & Controls

Boiler Plants

BMS Systems

HVAC Building Envelope

Equipment

Electric Distribution

Energy Conservation

Measures

Energy $$ Savings Pay

Back the Investment Over a 5-20 Year Period

ESCO’s Design & Implement

Energy Savings Projects

Buildings and Energy Types

Morton Building (DOT) Division of Motor

Vehicles (Safety) 27/29 Hazen (DHHS,

DES, DoIT, labs) 33 Hazen (DOS)

Looked at reductions in: Natural Gas Electricity

Goals and Scoring Criteria

Maximize fossil fuel savings within context of RSA (meets 20 year payback)

Encourage ESCOs to be creative while adhering to basic minimum criteria

Allowed State to compare proposals objectively

Lighting Systems and Controls

BMS HVAC Motors and VFDs Envelope Water Boiler Plants DHW Renewables

Scoring

50% - Reducing FF use 5% - Presentation and responsiveness to RFP 15% - Qualifications, experience, and resources 20% - Technical approach 10% - Management approach

Timeline

2012 and Prior – Discussed at IEEC Meetings

September 2012 – Stakeholders Meeting

January 2013 – Released RFP

April 2013 – Received Proposals

Summer 2013 Selected Vendor

December 2013 – G&C Approval for Audit Phase

May 2014 – Audit Report Received

Summer/Fall 2014 – Contract Negotiations

Winter 2014/15 – Financing RFP

February 2015 – G&C Approval for Construction

18 months from now until expected completion

ConEdison Solutions

Selected to conduct EPC from 7 proposals received Subsidiary of Consolidated Edison, Inc. Started in 1993 Local office in Burlington, MA Ken Nathanson, Director of National Accounts John Johnson, Head Engineer Many other ConEdison employees and

subcontractors will be working on project

Measures

Morton Building Lighting Retrofits Upgrade Chiller Piping Improve Building Controls Improve Building

Envelope Low-flow Restroom

Retrofits New Electrical

Transformers Power Factor Correction PUC Grant-funded 82kW

Solar PV Array

DMV Lighting Retrofits New Boiler New Building Controls Improve Existing Controls VFDs Improve Building


Retrofits Power Factor Correction

Measures (cont.)

27/29 Hazen Lighting Retrofits Chiller and HVAC

Replacement Improve Building Controls Improve Building



Transformers

27/29 Hazen Steam Traps VFDs Plug-load Controls Power Factor Correction New Ventless Lab Hoods Air Rebalance in Labs Biomass Boiler

Measures (cont.)

Department of Safety Lighting Retrofits New Boiler Improve Building Controls Improve Building



Transformers New Ventless Lab Hoods Power Factor Correction

Highlights

Current Utility Costs

Avg. Cost per

square foot

Total Project Cost*

Estimated Savings

Payback (years)*

Energy Cost

Reduction

Fossil Fuel

Reduction

$2.5 million

$4.10 $12.7 million

$949,508 annually

13.4 36% 71%

*does not include finance costs

3rd Party Financing - Banc of America Public Capital Corp Interest Rate – 2.5955% Project Payback w/Interest – 16.95 years Contract Term – 17 annual payments beginning when construction period ends

Can We Reduce Fossil Fuel Use by Over 70%?

Natural Gas (100% FF), Electricity (43% FF) Annual energy use ~110,000,000 kBtu (about

50/50) ~75% is for 27/29 Hazen 27/29 Hazen will eliminate nearly all of its NG usage

in favor of biomass ~82 kW in solar Many EE measures reduce electricity and natural gas

usage (and thus FF)

The Numbers

Morton Building

Project Cost $1,043,878*

Annual Energy Savings $101,376

Fossil Fuel Savings (kBtu) 3,227,375

% Energy Reduction 33%

% Fossil Fuel Reduction 44%

*Cost does not include $509,517 in rebates/grants

The Numbers

DMV

Project Cost $469,069





The Numbers

27 Hazen

Project Cost $729,856


Fossil Fuel Savings (kBtu) 898,316

% Energy Reduction 33%**

% Fossil Fuel Reduction 80%**

**Percent reductions calculated on 27/29 Hazen as a whole

The Numbers

29 Hazen (Core)

Project Cost $1,554,143*





*Cost does not include $174,890 in rebates/grants **Percent reductions calculated on 27/29 Hazen as a whole

The Numbers

29 Hazen (Labs)

Project Cost $8,280,826





**Percent reductions calculated on 27/29 Hazen as a whole

The Numbers

Safety

Project Cost $613,509*





*Cost does not include $287,584 in rebates/grants

Lessons Learned

Engage champions – define roles at the beginning of project and include $$ in project for additional help

Be specific – in order to compare proposals, we learned the more that can be specified (energy rates, baseline energy data, finance calcs, etc.) the more consistent the proposals

Work ahead when possible – in order to shorten the timeline, draft contracts, for example, can be worked on while audit is taking place

Lessons Learned (cont.)

Cooperation - This project has been successful due to the contributions of many team members. Dozens of state employees were needed to make this happen: RFP and contract writers and reviewers Facilities staff to guide vendors through buildings Selection team to review proposals and interview ESCOs Treasury staff to provide funding mechanism Cooperative tenants

What’s Next?

Cannon project is moving forward with EPC and taking audit contract to G&C

DAS is working internally on vetting other projects and revising RFP

Many agencies in the queue, interested in future EPCs

Questions?

?

Documents

Energy Performance Contract – 4 Buildings on Hazen Drive Board/Meetings/2015...Annual allocation dependency clause ... DES, DoIT, labs) ... Energy Performance Contract – 4 Buildings